CommSecure Makes Safe Partnership
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[Sydney, Australia, June 1, 2000]: E-commerce security technology developer CommSecure has partnered with Internet transaction insurance SafeTrade to provide a more complete solution for online merchants and shoppers.
Under the terms of the agreement, CommSecure will become SafeTrade's first Australian preferred Internet payment gateway provider, as part of a move by CommSecure to differentiate itself in the market, and pave the way for growth.
The alliance is designed to instill confidence in e-commerce particularly among consumers, with SafeTrade offering insurance on transactions conducted online. The company covers customers purchasing from retail sites that are part of its member network, after e-tailers apply and take out insurance policies on the e-commerce facilities at their site.
The company guarantees consumers that if their credit card details are used fraudulently after they have been provided to a member site, they will be reimbursed up to AUS$2000 (US$1140) for their loss.
SafeTrade has a handful of Australian merchants as members so far, that include music e-tailer ChaosMusic, ToySpot, BeautySpot, auction site GoFish and book retailer Dymocks. When applying for insurance, sites must prove they are good risks based on the quality of the e-commerce security and fulfilment, and they pay a base rate of around AUS$0.50 (US$0.29) per transaction for the protection.
Through the alliance, SafeTrade will seek to expand this network by sharing leads with CommSecure, and by pitching to potential merchant clients together. "We are working together because we believe we answer different parts of the same e-commerce security question," said CommSecure managing director Ray Loygaza.
Both companies are also planning to market their offerings online and offline, and SafeTrade has formed an alliance with recently added client ninemsn to market its service.
While the insurance covers consumers as part of a carrot to entice them to shop online, SafeTrade and CommSecure's arrangement does not offer the same protection to merchants. Although the financial impact of credit card fraud on e-tailers has not been quantitively measured, merchants bear the brunt of its effects.
Credit card companies such as Visa and Mastercard pass on chargeback costs from disputed credit card transactions to merchants. Australian merchant sites such as electronics retailer estore and travel agent travel.com.au put the cost of these chargebacks at between five and seven percent of their annual revenue.
"A fairly large proportion of repudiated transactions originate online, although the number of online transactions is still not high," said regional partner of enterprise risk services at Deloitte Touche Tohmatsu, Dean Kingsley.
Both CommSecure and SafeTrade have committed future efforts to protecting the merchant more in e-commerce, and although neither company has announced specific offerings, SafeTrade chairman Howard Davies said that the company would announce new services in the leadup to its planned Initial Public Offering (IPO) later in the year.
SafeTrade also wants to establish an e-commerce portal of sorts, through which consumers can link to sites that offer its insurance protection. This initiative would be an extension of the smaller-scale service it currently offers through it